Article Critique #1
The first article reviewed was the Use ERP Internal Control Exception Reports to Monitor and Improve Controls. The abstract discusses how businesses with ERP systems are able to utilize internal controls to improve their financial reporting. It also goes on to discuss how internal control reporting can be used to monitor and improve employees access controls and segregation of duties.
The Enterprise Resource Planning (ERP) system provides businesses the opportunity to have constant monitoring and improvement over their internal control system. The ERP system internal control allows management to comply with the Sarbanes-Oxley Act of 2002 (SOX). Systems have implemented the use of internal control systems for many years; however, it was not until the ERP system was developed that the internal control systems could be monitored. Internal control systems have been found to monitor and improve an employee’s access controls and segregation of duties. Implementing the ERP system with internal controls helps company’s reduce costs, become more efficient, and respond faster to changes within the marketplace. The purpose of this journal article is to review what internal controls are and how they benefit a company. In addition, the article discusses the importance of internal controls and the newer approach associated with internal control compliance.
The categories of this Literature Review are (1) Importance of Internal Controls, (2) Continuous Monitoring Using ERP Exception Reports, (3) Assumptions of the Model, (4) Access Administrator, (5) User Access Controls, (6) Super-User Oversight, and (7) Segregation of Duties. There were no outside sources noted for this artic...
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...ies with ineffective internal controls are recognized without the cost of management reporting on internal control and with only an uncertain rise in financial audit effort regarding the cause of known misstatements. According to Kinney and Shepardson the limitations of their study is they were not able to determine the actual effectiveness of ICFR in their sample companies overall or across filer groups. They were also unable to show how effectiveness might differ over time due to natural causes or as a result of a SOX type disclosure requirement.
The referenced journal article applies to the research topic because it discusses the requirements of the SOX. It also discusses what internal controls were like prior to SOX being implemented. This information is important to know and understand, so the reader knows the history regarding internal control regulations.
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